What is a VAT qualifying car?
A VAT qualifying car can be a hugely attractive prospect for the would-be supercar investor. With potentially huge savings over non-VAT qualifiers, these cars become must-haves for those in the very specific circumstances required.
Let’s start with the basics, a VAT qualifying car is one which has been previously owned by a VAT-registered business or individual. If a buyer is VAT registered then they will be able to claim back the VAT following the purchase, which is equal to 20 per cent of the total price so it's easy to understand why these cars are so desirable.
The usual suspects for VAT qualifiers are those used as test drive cars by dealer groups or cars used purely for commercial purposes. New cars also satisfy these criteria. These cars often come with ultra-low mileage and as a result, are usually in pristine condition.
What’s the catch?
As you can imagine, there are certain catches for these cars. A VAT qualifier requires an unbroken chain of all previous owners claiming back the VAT following each sale. One missing link and the car is no longer classified as a qualifier.
There aren’t many of these cars out there to begin with either, owing to the specific qualifier requirements. That selection becomes even more sparse past the five-year mark, by which point most cars have lost that coveted status.
Benefits for global buyers
International buyers stand to benefit from massive savings when acquiring a VAT qualifier. When being exported further afield, buyers don’t have to pay the VAT deduction and if that wasn’t enough, it's also reclaimable if the buyer is VAT registered. EU-based buyers aren’t currently eligible for these benefits as VAT is applied in Europe.
PaddlUp has handled many VAT qualifying cars in the past, most recent of which was the now-sold Aston Martin Vanquish S Ultimate which proved to be an inspired investment for one of our clients. If you are looking for a VAT qualifier, we can assist with sourcing it. Contact our team to discuss our services in more detail.